Pictet Picks Smaller Hedge Funds To Boost Returns

Nov 24 2010 | 5:07am ET

While most hedge fund investors are pouring their money into larger, more established firms, Swiss private bank Pictet & Cie is running the other way.

The firm's US$10 billion fund of hedge funds unit plans to increase its allocations to emerging hedge fund managers, with a consequent decrease in the amount it invests in the industry's big names. Pictet Alternative Investments could boost the amount it invests in smaller firms to 60% of its hedge fund assets, Bloomberg News reports.

"The typical situation in the aftermath of a crisis is people tend to focus too much on the risk and not enough on performance," Pictet AI CEO Nicolas Campiche said. "We're trying to refocus a bit of our portfolio on lesser-known entities, smaller, more nimble funds."

While returns are a major driver of the move, Campiche said risk plays a role, too: the risk inherent in relying on larger firms with long-tenured, high-profile managers.

"It's a more challenging environment and some that have nothing to prove any more, either to themselves or to the investor base, may just decide to do something else," he said. "That Druckenmiller risk is higher today than three years ago. This is a bit of new risk in our portfolio."

Stanely Druckenmiller, the founder of Duquesne Capital Management, abruptly announced in August that he would shutter the US$12 billion firm following three years of disappointing returns.


In Depth

Will Liquid Alts’ Performance Sustain Future Asset Flows?

Aug 25 2014 | 10:34am ET

Liquid alternative investment funds saw the highest percentage of capital inflows...

Lifestyle

Hedgies, Economists and Musicians Mingle At Milkin Mixers In Hamptons

Aug 25 2014 | 6:00am ET

Leave it to Michael Milken to bring some gravitas and sweat to the Hamptons -- along...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.